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Google Rebuts Europe on Antitrust Charges

Sundar Pichai, the new chief executive of Google. The company is reorganizing its business units under a new name, Alphabet.Credit
Jeff Chiu/Associated Press

Google on Thursday rejected claims from the European Union’s top antitrust official that the company favored some of its own search results over those of rivals, saying there was significant competition in the region’s online search market and that the company’s services increased choice for local consumers.

The company’s response, which was submitted to the European Commission Thursday afternoon, is the latest chapter in a long investigation into the Silicon Valley technology giant, which would face fines worth billions of dollars if it is found to have broken the European Union’s antitrust rules.

Margrethe Vestager, the Europe Union’s antitrust chief, laid out charges against Google in April, highlighting how the region’s authorities believe that Google has abused its dominance in web searches to benefit some of its own services. The company holds a roughly 90 percent share in Europe’s search market, compared with around 65 percent in the United States.

Ms. Vestager, a Danish politician who has been in the post for less than a year, has also said that the European Union is investigating Google over the dominance of its Android smartphone software, which is used by almost three-quarters of Europe’s smartphone users, according to the data provider IDC.

He said that multiple rivals — including big American companies like Amazon and eBay — continued to compete against Google for online search requests. He added that instead of reducing competition, Google sent roughly 20 billion referrals to other Internet companies in Europe over the last decade, leading to a 227 percent increase in web traffic to those sites.

Mr. Walker also said Google’s searches provided individuals with tailored — and specific — results for their online queries. Any attempt to alter how the company offered its search results could harm the quality and relevance of these queries, he warned. He did not comment about Europe’s investigation into Android.

“We believe that the statement of objection’s preliminary conclusions are wrong as a matter of fact, law and economics,” said Mr. Walker, in reference to the European Commission’s official charge sheet, or statement of objections.

“Our search engine is designed to provide the most relevant results and most useful ads for any query,” he added. “Users and advertisers benefit when we do this well. So does Google.”

A spokesman for the European Commission declined to comment.

European officials will review the company’s response. Many complainants in the case — which include a number of American companies, like Microsoft and Yelp, as well as several European technology, media and publishing companies — are also expected to voice their own views about Google’s 150-page response to Europe’s antitrust claims.

Several of these companies rejected Google’s claims, and called on the European Commission to push forward with its case.

“Google has decimated competition,” Thomas Vinje, a lawyer for FairSearch Europe, which represents Google’s rivals, said in a statement. “Consumers have been harmed — and paid higher prices.”

A final decision about whether Google abused its online search dominance is not expected until late this year, at the earliest, according to European officials and industry executives. Both Google and the complainants are likely to continue their extensive lobbying efforts in Brussels and other European capitals to win over regulators and lawmakers.

Photo

Margrethe Vestager, the Europe Union’s antitrust chief, has highlighted how the region’s authorities believe Google has abused its dominance in web searches to benefit some of its own services.Credit
T.J. Kirkpatrick for The New York Times

Two weeks ago, Google announced it was reorganizing its business units under a new name, Alphabet. The revamping, however, will not affect the antitrust case, according to European officials and antitrust lawyers.

Under the new structure, Alphabet will act as a parent entity. The biggest company under that umbrella will be the traditional Google business, which includes the search engine, mapping division and YouTube.

The lengthy antitrust case is among recent investigations that European officials have brought against American technology companies. The region’s antitrust authorities are looking into whether Apple received preferential tax treatment in Ireland and whether Amazon received similar favors in Luxembourg. And several of Europe’s privacy watchdogs have questioned how Facebook uses customers’ online data.

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That has raised concerns among some industry executives that Europe is focusing on American companies in a bid to bolster the region’s own technology sector. Policy makers in Europe reject those claims, saying they apply rules fairly to all companies operating in the region.

As part of its four-year investigation into Google, the European Union has initially focused its competition charges on the company’s comparison shopping site, claiming that Google favors its own services over those of rivals. The bloc, however, is also investigating potential antitrust abuses by Google in other so-called vertical searches for things like online restaurant and travel suggestions. Those inquiries may still lead to charges against the company, according to officials.

Google could face fines based on the revenue generated from European users on the company’s AdWords online advertising service, according to two other people with knowledge of the matter who spoke on the condition of anonymity.

European officials have the power to impose fines of up to $6.7 billion, or 10 percent of Google’s most recent annual revenue.

In the past, however, Europe’s antitrust fines have fallen well below that mark. The biggest fine ever levied in a European antitrust case was $1.2 billion in 2009 against Intel for abusing its dominance of the computer chip market.

A version of this article appears in print on August 28, 2015, on Page B3 of the New York edition with the headline: Google Rebuts Europe on Antitrust Charges. Order Reprints|Today's Paper|Subscribe